Hi! I’m Yuan Ge. The National Day holiday is coming soon. At this point in time, the budget bill for the new fiscal year in the United States will also be announced in the next few days. What kind of impact will it have on the crypto market? Let me tell you what I think!

background:

The U.S. federal government's fiscal year is about to end on September 30. As the Democratic and Republican parties' fight over the federal budget for the new fiscal year has reached a stalemate, the risk of the federal government shutting down due to running out of funds is rising again. If the two parties cannot reach an agreement in the last few days, the U.S. federal government will be in the predicament of the 22nd "shutdown" in history.

The U.S. federal government usually needs Congress to allocate funds according to the fiscal year to maintain its operation. This fiscal year is about to end on September 30, and the existing funds can only support the operation of the federal government until September 30. If the two parties cannot reach an agreement on the new fiscal year budget or temporary appropriations bill, some federal government agencies will be closed from October 1.

The current U.S. Congressional budget process began in 1980 and has been suspended 22 times since then, an average of about once every two years. I remember that in 2018, it was suspended three times in one year, the last time for 35 days, and it even spanned a year from 2018 to 2019. I can say that I am quite experienced in this issue.

Why does this problem arise? Simply put, there is no money. The 30th of the month is the last day of the 2023 fiscal year in the United States. If the United States fails to pass the fiscal budget law for next year before that, the US government will shut down on October 1st due to lack of money. The deadline is approaching, but the Republicans have been suppressing the plan. Of course, everyone knows the purpose, which is nothing more than putting pressure on the Democratic government. So is it possible that the government will really shut down this time? I think it’s really hard to say. For the cryptocurrency circle, the impact is actually not that big.

Influence:

Since there is a wealth of experience in "shutdowns", the consequences of a government shutdown are not scary for both parties. Usually, non-core departments are temporarily closed, not all departments. There are two main reasons for this problem. First, the US fiscal pressure is indeed great. The two governments have been frantically waterproofing, which has led to a significant increase in the growth rate of US fiscal spending. On the other hand, the rapid interest rate hike by the Federal Reserve has led to a high increase in the government's treasury debt interest expenses.

So what will be the impact if the government really shuts down? Historically, it actually has little impact on the investment market. It mainly affects the economy. First of all, the accuracy of the statistical department will be affected, and the decisions of the Ministry of Finance and the Federal Reserve may also be affected, and the efficiency of the response will definitely not be guaranteed. So what about the forecasts of the institutions? At this time, if it is stopped for a few days, it will be fine. If the shutdown lasts for more than two weeks, the annualized quarterly GDP growth rate may drop by 0.5%, and the unemployment rate may rise to 3.9%. If the shutdown lasts for more than a month, the unemployment rate in October may be 4%, directly entering a recession. If this happens, it should be good news for non-investment markets and the currency circle, because the Federal Reserve will face greater pressure if it wants to continue tightening, so some funds will flow into the domestic market, which is a good thing for the currency market.

suggestion:

So we can choose to be cautious in shorting near this time point. Of course, Yuan Ge’s prediction of the general trend is still bearish. After all, Yuan Ge did not choose to take profit at the low position of 27174. It is recommended that prudent investors can choose to wait and see, and choose to enter the short position at a high position after the event is fully implemented. . . We will continue to update if there are new market trends in the future. Please follow us to avoid getting lost! #美联储是否加息？ #美国政府停摆 #BTC